Latest News for 3% Tax Withholding
Walmart is the largest employer in the world with approximately 1,300,000 employees worldwide.¬†
The Internal Revenue Service (IRS) issued final rules last week that delay the 3% withholding requirement on government contracts until 2013. Under this arrangement, the withholding and reporting requirements will apply to payments made after December 31, 2012. The U.S. Treasury Department received numerous comments including one from NACM-GBG that assisted in the final regulation conclusion. NACM-GBG will continue to work with Congress to repeal Section 511 of the Tax Increase Prevention and Reconciliation Act (P.L. 109-222).
Did YOU Pay Your Taxes?
According to the Government Accountability Office (GAO), more than $24 billion in stimulus funds went to contractors, subcontractors and grant recipients that owe the government more than $750 million in unpaid federal taxes. Senators Baucus, Coburn, Grassley, Hatch and Levin have requested that GAO investigate the full extent of the problem. A subcommittee will probe possible solutions, including the need for legislation. Senator Levin stated that nonpayment of tax can be grounds for denying a specific contract or debarring a contractor from bidding on any contract. The GAO study found the following:
- Unpaid corporate taxes: $417 million (55%)
- Unpaid payroll taxes: $207 million (27%)
- Other unpaid taxes: $133 million (18%)